Volterra Announces Financial Results and Acquisition of Element Energy

Volterra Announces Financial Results and Acquisition of Element Energy

FREMONT, Calif., Jan. 22, 2013 (GLOBE NEWSWIRE) -- Volterra Semiconductor
Corporation (Nasdaq:VLTR), a leading provider of high-performance analog and
mixed-signal power management semiconductors, today reported financial results
for its fourth quarter and fiscal year ended December 31, 2012.

Net revenue for the fourth quarter of 2012 was $40.3 million, a 4% increase
over net revenue of $38.8 million for the fourth quarter of 2011, and a 4%
decrease from net revenue of $42.1 million for the third quarter of 2012. GAAP
net income was $4.6 million, or $0.18 per share (diluted), for the fourth
quarter of 2012, a 20% decrease from GAAP net income of $5.7 million, or $0.22
per share (diluted), for the fourth quarter of 2011 and a 25% decrease from
GAAP net income of $6.1 million, or $0.23 per share (diluted), for the third
quarter of 2012.

Volterra also reported net income and basic and diluted net income per share
on a non-GAAP basis. Non-GAAP net income excludes the effect of stock-based
compensation expense. Non-GAAP net income was $7.1 million, or $0.28 per share
(diluted), for the fourth quarter of 2012, a 9% decrease from non-GAAP net
income of $7.8 million, or $0.30 per share (diluted), for the fourth quarter
of 2011 and a 18% decrease from non-GAAP net income of $8.7 million, or $0.33
per share (diluted), for the third quarter of 2012.

For the full year 2012, Volterra reported annual net revenue of $168.0
million. GAAP net income was $22.8 million, or $0.86 per share (diluted), for
the fiscal year ended December31, 2012, compared to GAAP net income of
$20.6million, or $0.79 per share (diluted), for the fiscal year ended
December31, 2011. Non-GAAP net income was $32.9 million, or $1.24 per share
(diluted), for the fiscal year ended December31, 2012, compared to non-GAAP
net income of $28.9million, or $1.10 per share (diluted), for the fiscal year
ended December31, 2011.

"I am proud to report Volterra's twelfth consecutive year of revenue growth
and our ninth consecutive profitable year," said Volterra President and CEO
Jeff Staszak. "I am also pleased to announce that Volterra has acquired
Element Energy, a startup with technology that significantly improves the
performance, lifetime, reliability and cost of large battery packs used in a
wide range of applications including stationary and renewable energy storage
and hybrid and electric vehicles."

Earnings Conference Call

Volterra will be conducting a conference call today at 2:30 p.m. (PST). To
access the conference call, investors can dial (877) 941-0844 approximately
ten minutes prior to the initiation of the teleconference. International and
local participants can dial (480) 629-9835. Investors should reference
Volterra. A digital replay of the conference call will be available until
midnight on Tuesday, January29, 2013. To access the replay, investors should
dial (800)406-7325 or (303)590-3030 and enter access code 4588519#. A
webcast of the conference call also will be available from the Investors
section of the Company's website at: http://www.volterra.com until midnight on
Tuesday, February19, 2013.

About Volterra Semiconductor Corporation

Volterra Semiconductor Corporation, headquartered in Fremont, CA, designs,
develops, and markets leading edge silicon solutions for low-voltage power
delivery. The Company's product portfolio is focused on advanced switching
regulators for the computer, datacom, storage, and portable markets. Volterra
operates as a fabless semiconductor company utilizing world-class foundries
for silicon supply. The Company is focused on creating products with high
intellectual property content that match specific customer needs. For more
information, please visithttp://www.volterra.com.

Non-GAAP Financial Measures

Volterra provides all information required in accordance with generally
accepted accounting principles (GAAP), but it believes that evaluating its
financial results may be difficult if limited to reviewing only GAAP financial
measures. Volterra's management believes the non-GAAP information provided is
useful to investors and other users of its financial information and its
inclusion with our financial results is warranted for several reasons:

  oit can enhance the understanding of Volterra's financial performance by
    adjusting for special, non-recurring items that may obscure results and
    trends in our core operating performance, particularly in reconciling
    differences between reported income and actual cash flows;
  oit can provide consistency in reviewing Volterra's historical performance
    between periods, as well as allowing for better comparisons of Volterra's
    performance with similar companies in Volterra's industry;
  oit allows users to evaluate the results of the business using the same
    financial measures that management uses to evaluate and manage Volterra's
    internal planning, budgeting and operations; and
  oit provides investors with additional information used by management, its
    board of directors and committees thereof, to determine management
    compensation.

Volterra's management reports and uses calculations of (i)non-GAAP gross
margin and non-GAAP gross margin as a percent of revenue, which represents
gross margin excluding the effect of stock-based compensation; (ii)non-GAAP
income from operations (and its components, non-GAAP research and development
expense, non-GAAP selling, general, and administrative expense, non-GAAP total
operating expenses, and including non-GAAP gross margin as indicated above) as
well as non-GAAP operating margin as a percent of revenue which represent
income from operations and its components excluding the effect of stock-based
compensation and special items such as restructuring charges; and
(iii)non-GAAP net income (and its components listed above), non-GAAP net
margin as a percent of revenue, and non-GAAP diluted net income per share,
which represents net income and diluted net income per share excluding the
effect of stock-based compensation expense and special items such as
restructuring charges.

Investors should note that the non-GAAP financial measures used by Volterra
may not be the same non-GAAP financial measures, and may not be calculated in
the same manner, as that of other companies. Whenever Volterra discloses such
a non-GAAP financial measure, it provides a reconciliation of non-GAAP
financial measures to what it believes to be the most closely applicable GAAP
financial measure. A reconciliation of GAAP net income to non-GAAP net income
is included in the financial statements portion of this release and at the
Investors section of our website atwww.volterra.com. Investors are encouraged
to review the related GAAP financial measures and the reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP financial
measure. Volterra does not provide a non-GAAP reconciliation for non-GAAP
estimates on a forward-looking basis, as it believes it is unable to provide a
meaningful or accurate calculation or estimation of stock based compensation
or other special items without unreasonable effort.

Volterra is a trademark of Volterra Semiconductor Corporation and is
registered in certain jurisdictions. All other names mentioned are the
property of their respective owners and are mentioned for identification
purposes only.

Forward-Looking Statements:

This press release regarding financial results for the fiscal year and quarter
ended December 31, 2012 contains forward-looking statements based on current
expectations of Volterra. The words "expect," "will," "should," "would,"
"anticipate," "project," "outlook," "believe," "intend," and similar phrases
as they relate to future events are intended to identify such forward-looking
statements. These forward-looking statements reflect the current views and
assumptions of Volterra but are subject to various risks and uncertainties
that could cause actual results to differ materially from expectations. Among
the factors that could cause actual results to differ materially from those in
the forward-looking statements are the following: risks related to our ability
to maintain revenue growth or other financial results; risks related to our
dependence on a limited number of customers; risks related to the limited
markets we operate in and the limited number of products we sell; risks
related to the quality of our products or the management of our inventory;
risks related to our relationship with our vendors and contractors;
intellectual property litigation risk; and other factors detailed in our
filings with the Securities and Exchange Commission, including the annual
report on Form 10-K filed on March6, 2012 and the quarterly report on Form
10-Q filed on November1, 2012. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date of this
press release. All forward-looking statements are qualified in their entirety
by this cautionary statement, and Volterra undertakes no obligation to revise
or update any forward-looking statements to reflect events or circumstances
after the date hereof, except as required by law.


VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
                                                                
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                                                                
                                    Three Months Ended  Twelve Months Ended
                                    December 31,        December 31,
                                    2012      2011      2012       2011
                                                                
Net revenue                          $40,259 $38,776 $168,043 $155,986
Cost of revenue *                    17,193   16,165   71,064    66,468
Gross margin                         23,066   22,611   96,979    89,518
                                                                
Operating expenses:                                              
Research and development *           10,896   9,720    43,253    37,383
Selling, general and administrative  6,726    6,602    26,939    26,646
*
Litigation                           690      711      3,473     4,679
Total operating expenses             18,312   17,033   73,665    68,708
                                                                
Income from operations               4,754    5,578    23,314    20,810
Non-operating expense (income), net  54       (91)     33        58
Income before income taxes           4,700    5,669    23,281    20,752
Income tax expense (benefit)         125      (15)     434       108
Net income                           $4,575  $5,684  $22,847  $20,644
                                                                
Net income per share:                                            
Basic                                $0.18   $0.23   $0.90    $0.84
Diluted                              $0.18   $0.22   $0.86    $0.79
                                                                
Weighted average shares outstanding:                             
Basic                                25,112   24,712   25,266    24,654
Diluted                              25,912   26,148   26,556    26,163
                                                                
* Includes stock-based compensation                              
expense as follows:
Cost of revenue                      $180    $198    $776     $769
Research and development             1,193    899      4,318     3,368
Selling, general, and administrative 1,178    1,014    4,946     4,096
Total stock-based compensation       $2,551  $2,111  $10,040  $8,233
expense



VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
                                                           
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
                                                           
                                   Three Months Ended December 31, 2012
                                              Effect of     
                                              Stock-based  
                                   GAAP        Compensation  Non-GAAP
                                                           
Gross margin                        $23,066   $(180)      $23,246
Gross margin %                      57.3%       -0.4%         57.7%
                                                           
Operating expenses:                                         
Research and development            $10,896   $1,193      $9,703
Selling, general and administrative 6,726      1,178        5,548
Litigation                          690        --          690
                                                           
Total operating expenses            $18,312   $2,371      $15,941
                                                           
Income from operations              $4,754    $(2,551)    $7,305
Operating margin %                  11.8%       -6.3%         18.1%
                                                           
Net income                          $4,575    $(2,551)    $7,126
Diluted net income per share        $0.18     $(0.10)     $0.28
                                                           
                                                           
                                   Three Months Ended December 31, 2011
                                              Effect of     
                                              Stock-based  
                                   GAAP        Compensation  Non-GAAP
                                                           
Gross margin                        $22,611   $(198)      $22,809
Gross margin %                      58.3%       -0.5%         58.8%
                                                           
Operating expenses:                                         
Research and development            $9,720    $899        $8,821
Selling, general and administrative 6,602      1,014        5,588
Litigation                          711        --          711
                                                           
Total operating expenses            $17,033   $1,913      $15,120
                                                           
Income from operations              $5,578    $(2,111)    $7,689
Operating margin %                  14.4%       -5.4%         19.8%
                                                           
Net income                          $5,684    $(2,111)    $7,795
Diluted net income per share        $0.22     $(0.08)     $0.30



VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
                                                            
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
                                                            
                                   Twelve Months Ended December 31, 2012
                                              Effect of      
                                              Stock-based   
                                   GAAP        Compensation   Non-GAAP
                                                            
Gross margin                        $96,979   $(776)       $97,755
Gross margin %                      57.7%       -0.5%          58.2%
                                                            
Operating expenses:                                          
Research and development            $43,253   $4,318       $38,935
Selling, general and administrative 26,939     4,946         21,993
Litigation                          3,473      --           3,473
                                                            
Total operating expenses            $73,665   $9,264       $64,401
                                                            
Income from operations              $23,314   $(10,040)    $33,354
Operating margin %                  13.9%       -5.9%          19.8%
                                                            
Net income                          $22,847   $(10,040)    $32,887
Diluted net income per share        $0.86     $(0.38)      $1.24
                                                            
                                                            
                                   Twelve Months Ended December 31, 2011
                                              Effect of      
                                              Stock-based   
                                   GAAP        Compensation   Non-GAAP
                                                            
Gross margin                        $89,518   $(769)       $90,287
Gross margin %                      57.4%       -0.5%          57.9%
                                                            
Operating expenses:                                          
Research and development            $37,383   $3,368       $34,015
Selling, general and administrative 26,646     4,096         22,550
Litigation                          4,679      --           4,679
                                                            
Total operating expenses            $68,708   $7,464       $61,244
                                                            
Income from operations              $20,810   $(8,233)     $29,043
Operating margin %                  13.3%       -5.3%          18.6%
                                                            
Net income                          $20,644   $(8,233)     $28,877
Diluted net income per share        $0.79     $(0.31)      $1.10



VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

                                      December 31, September 30, December 31,
                                      2012         2012          2011
Assets                                                          
Current assets:                                                 
Cash, cash equivalents and short-term  $150,364   $142,683    $126,733
investments
Accounts receivable, net               24,487      24,329       22,399
Inventories                            18,719      20,192       14,687
Prepaid expenses and other current     3,103       3,173        2,933
assets
Total current assets                   196,673     190,377      166,752
Property and equipment, net            11,013      10,813       7,905
Other assets                           6,121       265          1,059
Total assets                           $213,807   $201,455    $175,716
                                                               
Liabilities and Stockholders' Equity                           
Current liabilities:                                            
Accounts payable                       $7,073     $6,522      $5,643
Accrued liabilities                    13,974      9,499        8,299
                                                               
Total current liabilities              21,047      16,021       13,942
                                                               
Lease incentives                       150         197          339
Other long-term liabilities            3,411       2,402        2,214
                                                               
Total liabilities                      24,608      18,620       16,495
Stockholders' equity:                                           
Common stock                           29          29           28
Additional paid-in capital             174,056     170,213      152,644
Retained earnings                      66,053      61,478       43,206
Treasury stock                         (50,939)    (48,885)     (36,657)
                                                               
Total stockholders' equity             189,199     182,835      159,221
                                                               
Total liabilities and stockholders'    $213,807   $201,455    $175,716
equity



VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
(In thousands)
(Unaudited)
                                                               
                                          Q4 2012    Q3 2012     Q4 2011
Selected Cash Flow Information:                                
Depreciation                              $934     $886      $792
Capital spending                          $(1,702) $(2,439)  $(774)
Stock repurchase program                  $(2,054) $(10,234) $(2,877)
Proceeds from sales of shares to employees $1,334   $1,309    $3,785
                                                               
Stock Buyback:                                                 
Shares repurchased                        94        436        140
Cumulative shares repurchased             4,873     4,779      4,275

CONTACT: For investor information contact:
         Heidi Flannery, Investor Relations
         (510) 743-1718
         investor@volterra.com
 
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